Rotating instability (RI) occurs at off-design conditions in compressors, predominantly in configurations with large tip or hub clearance ratios of s* %. RI is the source of the blade tip vortex noise and a potential indicator for critical operating conditions like rotating stall and surge. The objective of this paper is to give more physical insight into the RI phenomenon using the analysis results of combined near-field measurements with high-speed particle image velocimetry (PIV) and unsteady pressure sensors. The investigation was pursued on an annular cascade with hub clearance. Both the unsteady flow field next to the leading edge as well as the associated rotating pressure waves were captured. A special analysis method illustrates the characteristic pressure wave amplitude distribution, denoted as “modal events” of the RI. Moreover, the slightly adapted method reveals the unsteady flow structures corresponding to the RI. Correlations between the flow profile, the dominant vortex structures, and the rotating pressure waves were found. Results provide evidence to a new hypothesis, implying that shear layer instabilities constitute the basic mechanism of the RI.